GM to sell control of Chinese joint venture and half of Indian subsidiary to SAIC for much-needed cash

By Auto News Log • December 7th, 2009

It seems that General Motors is bent on repaying the bailout money the US and Canadian government gave the financially struggling corporation last summer and is willing to even sell one percent of its Chinese joint venture to SAIC, the biggest automaker in the Asian country, alongside half of its India subsidiary.

Those of you who haven’t been following the Asian operations of GM should note that it is currently present in China thanks to a 50:50 joint venture with SAIC, and in India through a wholly-owned subsidiary. It is now willing to sell one percent of the aforementioned venture, thus lending control of SAIC to the Chinese joint venture, and to set up a new 50:50 venture in India, with the same company.

The main reason behind this is that the company needs cash right now in order to pay up the loans it has. But don’t go thinking that this is a desperate move, as sources indicate that the 1 percent might be bought back, at a premium, when GM is earning more money, thus keeping its presence solid on one of the most profitable car markets in the world.

Let’s hope this gamble comes true, and pays off for both GM and for the tax payers.

Source: Reuters

 

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